Could Hurricane Florence Cost Insurers $20 Billion?
Here’s some grim back-of-the-envelope math for insurers: Hurricane Florence may wreak $15 billion to $20 billion in covered losses from wind and coastal storm-surge, if the past is any guide, according to catastrophe modeler Risk Management Solutions.
That range is based on benchmarking two similar hurricanes from decades past — Hazel in 1954 and Hugo in 1989 — and translating their damage into present-day figures, according to Tom Sabbatelli, an event response manager at RMS. It doesn’t include the potential cost of inland flooding.
With Florence expected to hit the U.S. East Coast later this week, it’s still difficult for modelers to predict what kind of damage the storm might cause.
“There can be the potential for significant uncertainty in a forecast track for a storm like Florence that is so far offshore,” Sabbatelli said in an interview. “Every event has its unique characteristics so we’re using that as a broad-brush first pass right now,” he said of the benchmarks.